Court rules Fed can't hide bailout documents

The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said.

The U.S. Court of Appeals in Manhattan ruled Friday that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Bros. Holdings Inc. The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released.

The Fed had argued that it could withhold the information under an exemption that allows federal agencies to refuse disclosure of “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”

The U.S. Freedom of Information Act, or FOIA, “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs wrote in the opinion. “If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”

But Bloomberg, which sued in November 2008 to have the documents made public, notes that its fight may be far from over. The Fed could ask for a rehearing or ask for the case to be heard before the full appeals court. Conceivably, this could go to the Supreme Court.

A Fed spokesman said the board was “reviewing the decision and considering our
options for reconsideration or appeal."

“We now have two courts, 59 senators and a large majority in Congress telling the Federal Reserve that the American people have a right to know which large financial institutions and corporations received more than $2 trillion in taxpayer loans, how much they received and what they are doing with the money,” Sanders said in a statement.

“This money does not belong to the Federal Reserve. It belongs to the American people, and the American people have a right to know where more than $2 trillion of their money has gone.”